Let’s face it, buying your first home is no walk in the park – especially in the current Australian real estate landscape! Thankfully, the government has measures in place to help give first-time homeowners a fair go: the First Home Owner Grant NSW( FHOG).
This scheme was introduced on 1 July 2000, when the Howard Government introduced the Goods and Services Tax (GST). To help offset some of the impact of GST on homeowners, the First Home Owner Grant was rolled out nationwide. Under this scheme, a one-off grant is available to eligible Australian citizens over the age of 18.
While the First Home Owner Grant is available Australia-wide, each state offers varying amounts of financial assistance and has different eligibility requirements. Read on for our in-depth guide to the First Home Owners Grant in NSW, including what the scheme covers, how to know if you’re eligible, how to apply and more.
What is the First Home Buyers Grant NSW?
The First Home Owner Grant (New Homes) Scheme is a NSW government initiative that assists home buyers with purchasing their first property. The scheme currently includes a lump sum grant of $10,000 for first home owners buying a new home up to the value of $600,000, or building a new property up to the value of $750,000.
First home buyers in NSW are also off the hook for paying insurance duty on lender’s mortgage insurance and depending on their circumstances, stamp duty. First home owners purchasing a new home valued up to $650,000 are exempt from paying stamp duty, while those buying properties from $650,001 to $800,000 receive a stamp duty discount based on a sliding scale. Eligible buyers also pay no stamp duty on purchasing vacant land valued up to $350,000, and receive a discount for properties valued from $350,000 and $450,000.
It’s key to note that the First Home Owner Grant in NSW is different
Under the First Home Buyers Assistance Scheme, you may be entitled to an exemption or discount on transfer duty. If your home is valued at less than $650,000, you can apply for a full exemption so that you don’t have to pay any transfer duty. If the value of your home is between $650,000 and $800,000, you can apply for a discount on transfer duty. The amount you’ll be required to pay will be based on the value of your home.
The FHBAS also applies to vacant land on which you plan to build your home. You won’t pay any transfer duty if your land is valued at less than $350,00 and for land valued between $350,000 and $450,000, you’ll receive a discount.
You can calculate the amount of transfer duty you would pay on your home using this calculator.
Is the First Home Owner Grant NSW still available?
Yes, the First Home Owner Grant NSW is available in the state and has been since 2000. However, the legislation has changed considerably over the years and may continue to do so – so always check the NSW Government Revenue site to stay up to date with current guidelines.
For example, when the FHOG was first introduced, it was available for both new and established homes. The grant was valued at $7,000 and there was no purchase price limit. Over the years, the FHOG has received a boost of thousands, in both 2008 and 2012 – great news for anyone trying to break into the NSW property market! As of 1 July 2017, the grant amount of $10,000 for first time buyers, is only applicable to new homes, and depends on the date of home purchase.
Who is eligible for the First Home Owner Grant NSW?
There’s a lengthly list of criteria you must fulfil in order to be eligible for the First Home Owner Grant NSW. These include:
- All applicants must be over the age of 18 and a ‘natural person’ (meaning, not a company or trust);
- At least one applicant needs to be a permanent resident or Australian citizen;
- The contract date must be on or after 1 January 2016;
- The home you are purchasing must be ‘new’, which the NSW government defines as: ‘This is the first time the house has been sold and the house has never been lived in before you move in, including by the builder or a tenant’.
Your home is also considered new if it has been renovated significantly before you bought it.
So, what constitutes ‘significantly?’ According to the NSW government: “most or all of the house was removed or replaced. This is the first time the home has been sold after those renovations. It hasn’t been lived in since being renovated, including by the builder or a tenant.”
- No applicant can have previously received a FHOG in any state or territory unless they repaid it;
- You must not have ever held an interest in any residential property in Australia before 1 July 2000. If you bought after 1 July 2000, you may still be eligible if you did not live in that property for a continuous period of at least six months;
- The property must never have been occupied by anyone, including the builder, a tenant or any other occupant.
How to apply for the First Home Owner Grant NSW
Now that you’ve determined whether you’re eligible, you may be wondering ‘how do I claim the First Home Owner Grant NSW?’
There are a couple of different routes you can go down. Firstly, you can apply yourself through the State Revenue Office (SRO) by submitting a First Home Owner Grant (New Homes) Application form. If you apply this way, the house must have been completed and you must be registered on the title. It’s also important to ensure you have sent all the necessary supporting documents.
These generally include:
- Proof of identity: Australian birth certificate, foreign passport, and Australian Visa, if born overseas, citizenship or permanent residency certificate or Visa, Australian Driver’s License, firearms license, Medicare card, motor vehicle registration and debit/credit financial institution card;
- Marital status: Marriage certificate, decree nisi (if divorced), partner death certificate (if widowed), and statutory declaration if separated;
- Proof of purchase: Contract to buy property,
certifiedcopy of transfer, title search, a certified copy of property valuation, current rate notice.
However, if you’re finding the process confusing or just want to ensure it goes off without a hitch, you can also apply through an approved agent, such as a solicitor or conveyancer. This approach is generally recommended if you’re also applying for a loan.
According to the scheme, only 20% of applications lodged are correct the first time. So, whichever way you decide to apply, it’s important to ensure you provide the appropriate supporting documents, sign the form, and send all information in as soon as possible.
What else should you know about the First Home Owner Grant NSW?
- Generally, the FHOG takes around 5 days to process, but you should allow yourself at least two weeks to receive it. If you are applying through a lender, they will usually receive the funds and transfer onto you;
- You are not required to pay tax on the First Time Home Owner Grant NSW;
- You may also be also be asked to supply additional documents once your application is received;
- Your application will need to be received within 15 months of your property settlement or completion of your new home to be eligible;
- If your circumstances change after you’ve received the grant and you no longer meet the eligibility criteria, you will be required to pay back the grant. If not, you may be taken to court and face a penalty of up to $110,000;
- If you won’t be able to move into the house within 12 months or you can’t live there for six continuous months, you must let the Revenue department know immediately to avoid consequences.
If you’re not buying a home in NSW, then you may be eligible for the First Home Buyer Grant in another state. Just remember that all states have different guidelines, so you need to read the legislation before applying for the FHOG.
If you’re looking to buy your first property in NSW, you may want to consider using one of eChoice’s experienced brokers to assist with your application and make the process as streamlined as possible. Plus, we also have access to hundreds of mortgage products, so we can help you find a competitive deal that best suits your needs.
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